Professional Documents
Culture Documents
CHAPTER 15
15-1: d
15-2: a
15-3: c
CHAPTER 15
15-1: d
15-2: a
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Less fair value of net assets acquired (P360,000 – P40,000) 320,000
Goodwill P 180,000
15-3: c
CHAPTER 15
15-1: d
15-2: a
15-3: c
CHAPTER 15
15-1: d
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Goodwill P 700,000
15-2: a
15-3: c
CHAPTER 15
15-1: d
15-2: a
15-3: c
15-4: a
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Property and equipment 385,000
Liabilities ( 70,000) 500,000
Gain on acquisition P ( 5,000)
15-5: a
15-6: a
15-7: a
15-8: a
15-9: d
Therefore:
Total assets (P800,000 + P300,000 + P60,000) P1,160,000
Total liabilities (P250,000 + P155,000 + P160,000 + P5,000) 570,000
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15-11: d
15-15: b
15-17: b
15-20: a
Cash and cash equivalent (P70,000 + P90,000) P 160,000
Inventory (P100,000 + P60,000) 160,000
Property and equipment (P500,000 + P300,000) 800,000
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Goodwill 85,000
Total assets P1,205,000
15-21: a:
Fair value per share:
New acquisition (P630,000/7,000 shares) P90
Fair value of previously owned shares (1,000* shares x P90) P 90,000 (10%)
Acquisition of new shares 630,000 (70%)
Total price paid for 80% interest P 720,000
Non-controlling interest (P720,000/80%) x 20% P 180,000
* P200,000 / P20 x 10% = 1,000 shares
15-22: c
Fair value of previously owned interest (10%) P 90,000
Price paid for new additional interest (70%) 630,000
Non-controlling interest 180,000
Total 900,000
Less fair value of net assets acquired (P910,000 – P130,000) 780,000
Goodwill P120,000
15-25: b
Cash P 40,000
Accounts receivable 20,000
Inventories (see 15-25) 140,000
Equipment (800,000 - 500,000) 300,000
Accounts payable (40,000)
Fair value of net assets P460,000
15-27: d
Goodwill P 10,000
Fair value of net assets acquired (15-25) 460,000
Total 470,000
NCI (163,000)
Price paid by Primo P 307,000
15-28: b
Parent NCI
Total 65% 35%
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Company implied value P470,000 P307,000 P163,000
Less fair value of net assets 460,000 299,000 161,000
Goodwill P 10,000 P 8,000 P 2,000
15-29: b
Non-controlling interest should be valued at the higher amount between the following:
15-30: c
Proof:
NCI does not share a gain on the acquisition. IFRS 3 (2008) provides that the gain is
attributed to the acquirer only.
PROBLEMS
Problem 15-1
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a. Investment in Solo Company stock 1,080,000
Cash 1,080,000
To record acquisition of 90%
of the outstanding shares of Solo.
Problem 15-2
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a. Investment in Straw Company 600,000
Cash 600,000
To record acquisition of 100% of Straw stock.
Problem 15-3
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a. Investment in Soto Company 950,000
Cash 950,000
To record acquisition of 80% stock of Sotto.
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Problem 15-4
Problem 15-5
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December 31, 2013
Cash P 70,000
Receivables 120,000
Inventory 170,000
Property and equipment – net 340,000
Goodwill 20,000
Total assets P720,000
Computation of goodwill:
Consideration given P250,000
Less fair value of net assets (P290,000 – 60,000) 230,000
Goodwill P 20,000
Problem 15-6
a. Investment in Seed Company 350,000
Cash 350,000
To record acquisition of 100% of Seed company stock.
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May 31, 2013 – Date of Acquisition
Problem 15-7
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Pop Corporation and Subsidiary
Working Paper for Consolidated Balance Sheet
April 30, 2013 – Date of acquisition
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Problem 15-8
Credits
Accounts payable 150,000 60,000 210,000
Bonds payable 290,000 (2) 50,000 240,000
Common stock – P Company 1,500,000 1,500,000
Common stock – S Company 100,000 (1)100,000
APIC – S Company 200,000 (1)200,000
Retained earnings – P Co. 1,050,000
Retained earnings – S Co. 230,000 (1)230,000 1,050,000
Total 2,700,000 880,000 640,000 640,000 3,000,000
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Problem 15-9
* NCI is measured at its proportionate interest in S Company’s net assets because the assessed
fair value of P80,000 is smaller.
Credits
Accounts payable 150,000 60,000 210,000
Bonds payable 290,000 (2) 50,000 240,000
Common stock – P Co. 1,500,000 1,500,000
Common stock – S Co. 100,000 (1)100,000
APIC – S Co. 200,000 (1)200,000
Retained earnings – P Co. 1,050,000 1,050,000
Retained earnings – S Co. 230,000 (1)230,000
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Problem 15-10
Problem 15-11
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1. Investment in Sun Company 1,900,000
Cash 1,900,000
3. Land 100,000
Building 200,000
Bond discount 40,000
Goodwill 100,000
Deferred taxes 20,000
Retained earnings 840,000
Additional paid in capital 1,300,000
Problem 15-12
Supporting computations:
Entry to record the issuance of 300 shares – Books of X Company (legal parent)
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Fair value analysis: Implied FV Parent (60%) NCI (40%)
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